SEPARATE STATEMENT OF COMMISSIONER FURCHTGOTT-ROTH
Concurring in Part and Dissenting in Part
In the Matter of the Applications of Shareholders of AMFM, Inc. and Clear Channel
Communications, Inc., for Consent to the Transfer of Control of AMFM Texas Licenses
Limited Partnership, et al.
Although I support today’s decision to approve the transfer of AMFM, Inc.’s
licenses to Clear Channel Communications, Inc., I cannot support the majority’s
determination to once again supplement the review of the Justice Department and the
detailed provisions of our rules with an amorphous public interest analysis. As I have
explained previously, this analysis is not only duplicative of the efforts of other federal
agencies, but the four-factored test upon which it is based is so loose as to be practically
limitless in its reach.
In the particular context of radio transactions, the Commission’s “public interest”
review focusing on concentration of ownership adds insult to injury. As I have said in
prior radio license transfer proceedings,
the Commission is [unlawfully] using its generalized "public interest" authority
under section 310 to override and effectively nullify the specific judgments that
Congress made about acceptable levels of concentration in radio in section 202(b)
of the '96 Act[, which sets statutory caps for local radio ownership.] The creation
of a regulatory scheme under section 310 that limits ownership to a greater degree
than does section 202(b), the specific section on ownership limits, is an end-run
around Congress' policy judgment. What authority does the Commission have to
"conduct additional analysis of the ownership concentration in the relevant
market" when that concentration is expressly permissible under the
Communications Act? Whatever the role of competitive analysis as a general
matter, it is clear to me that in the radio context, Congress has plucked that issue -
- as expressed in ownership limits -- out of the ambit of the public interest
standard. . . .
In short, the Commission cannot use section 310 to deprive a party of ownership
rights to which he is entitled under subsection 202(b).
Unfortunately, this Order again assumes the authority to do just that.
Furthermore, I must note the nonsensical lengths to which this Order goes in the
rote application of its new economic analysis. I fail to see the point of analyzing the
“competitive effects” of the license transfers in those markets where Clear Channel
currently owns no stations. By definition, there will be no increase in the concentration
of ownership levels in these markets; ownership will simply change hands.
Finally, I cannot let pass a deeply disturbing suggestion on the face of the
Chairman’s statement. Specifically, he states that:
When Clear Channel announced this merger, its Chairman publicly and
voluntarily committed that Clear Channel would provide opportunities for
minority companies to purchase stations divested as a result of this transaction.
Clear Channel followed through on this commitment. To complete this merger,
Clear Channel will spin off approximately 40 stations to small and minority
businesses. These spin-offs represent the most significant one-time increase in
minority ownership in history and mitigate somewhat the concentration problems
presented by this combination.
Separate Statement of Chairman William E. Kennard. If the approval of these proposed
license transfers were conditioned on an understanding – express or otherwise – that
Clear Channel sell any divested stations to buyers of a particular race, this entire Order
would be infected by a flagrant violation of the Equal Protection Clause.
Over and over again, the Supreme Court has held, and the lower courts have
reaffirmed, that government decisionmaking on the basis of race is presumptively
unconstitutional. Just as in City of Richmond v. Croson, in which the Court struck
down a minority set-aside for construction contracts, any condition that Clear Channel
sell a certain amount of stations to minority buyers would “den[y] certain citizens the
opportunity to compete for [those stations] based solely upon their race.”
Here, of course, there is no evidence that minority buyers of radio stations
historically have been discriminated against in the marketplace -- the bare minimum one
would have to show in order successfully to defend a buyer’s preference such as the
implied one. Given the lack of any proof of this sort, a reviewing court would likely
suspect the “illegitimate” regulatory motive of “simple racial politics,” to use the Court’s
phrase, to lurk behind the condition.
Whether the Commission can evade judicial review of this transparent
circumvention of the core requirements of Equal Protection by omitting discussion of the
spin-offs from the Order, and instead relying on extra-record “voluntary” commitments
by the regulated party, remains to be seen.
For the foregoing reasons, I concur only in the license transfer approval and
dissent from those sections of the Order that engage in the additional economic analysis
of the transfers.
###
See e.g., Separate Statements of Commissioner Harold W. Furchtgott-Roth, In Re
Applications for Consent to the Transfer of Control of Licenses and Section 214
Authorizations from MediaOne Group, Inc., Transferor, to AT&T Corp. Transferee, CS
Docket No. 99-251 (rel. June 6, 2000); In Re Applications of Ameritech Corp.,
Transferor, and SBC Communications Inc., Transferee, for Consent to Transfer Control
of Corporations Holding Commission Licenses and Lines Pursuant to Sections 214 and
310(d) of the Communications Act and Parts 5, 22, 24, 25, 63, 90, 95 and 101 of the
Commission's Rules, CC Docket No. 98-141 (rel. Oct. 8, 1999). The Commission is
scrupulously vague as to whether this Order applies the four-factored test. See supra at
note 9. I assume that the test is recited here for some substantive reason and thus address
it merits; surely it would verge on the arbitrary to apply the test in every Bureau but the
Mass Media Bureau. At the same time, I must note that even this capacious test cannot
be read to encompass the Order’s economic analysis of concentration issues: that analysis
is not related to the Act or our regulations (prongs one and two) (indeed, all statutory and
regulatory provisions on local ownership limits are satisfied here), nor does it have to do
with enforcement of the Act (prong three) or the identification of affirmative benefits
(prong four).
Separate Statement of Commissioner Harold Furchtgott-Roth in In Re Application of
Great Empire Broadcasting, Inc. and Journal Broadcast Corp. for Transfer of Control of
Omaha Great Empire Broadcasting, Inc., Licensee of WOW(AM) and WOW(FM),
Omaha, Nebraska, 14 FCC Rcd 11145 (1999) (emphasis added).
See supra at paras. 16-22.
Although the Chairman’s statement formally denies reliance on this action by Clear
Channel, see Kennard Statement at 1 (asserting that conduct of divestitures was
“unrelated to our analysis”), the rest of the statement belies this disclaimer. The statement
makes plain that he considered the sales to minority buyers as a factor that mitigated the
increased concentration created by the merger, thus helping him to see his way clear to
final approval of these transfers. See id (stating that “the way Clear Channel conducted
these divestitures provided a significant additional benefit”); id. (stating that “the spin-
offs do not assuage all” – but therefore presumably some – “of my concerns about
increasing concentration”). Moreover, as a matter of simple common sense, if the spin
offs were not relevant to the Chairman as decisionmaker, why are they mentioned, indeed
lauded, in his official statement? The disclaimer is legal boilerplate, designed as a shield
against the issue I raise here. Finally, even if one accepts the assertion that the spin offs
were not pertinent to official decisionmaking here, which, as I have tried to explain,
strains credulity in light of the Chairman’s own statement, statements like this are still
inappropriate. For they suggest that regulated companies may earn regulatory brownie
points by engaging in certain conduct (which would be clearly illegal if required by
government) favored by agency officials.
See also Press Release, Statement of FCC Chairman William Kennard on Minority
Broadcast Ownership (Feb. 16, 1999) (“I am encouraged to learn that Clear Channel
Communications and Jacor Communications have agreed to sell nine radio stations to
three minority-owned companies as part of the proposed Jacor/Clear Channel merger.
While I have not reviewed the full details of these particular transactions and cannot
comment on the specifics of the pending merger, I do want to commend these companies
for their commitment to seeking out minority broadcasters as potential buyers and for
their willingness to step forward and offer new station ownership opportunities to
minority companies.”).
See, e.g., Adarand Constructors, Inc. v. Pena, 515 U.S. 200 (1995); Lutheran Church-
Missouri Synod v. FCC, 141 F.3d 344 (1998).
488 U.S. 469 (1989).
Id. at 493.
Id.
Although I use the term “Commission,” I cannot say with certainty who did and did not
participate in this apparent agreement (although the Chairman clearly thinks that he did)
because I was not privy to any “promise[s]” that were given or received in connection
with these applications for license transfers.
On top of the constitutional dimensions of the Chairman’s suggestion regarding the
spin-offs, I have procedural and jurisdictional concerns. First, the condition that he
mentions is entirely extra-record, thus raising problems under the Administrative
Procedure Act. Allusions to extra-record conditions have the additional and unfortunate
effect of making outside parties wonder what other, unknown conditions might be
attached to this transfer; such impressions are highly damaging to the institutional
authority of this Commission. Second, nothing in the Communications Act indicates
statutory authority to designate buyers of broadcast property sold to comply with the Act
or our rules.